Silver Price Forecast: XAG/USD Holds $91 After 38% Pullback Signals Pause, Not Trend Reversal
Silver (XAG/USD) is trading a little under $91.05 after easing off its recent peak of $93.50 which it hit after a pretty sharp price...
Quick overview
- Silver (XAG/USD) is currently trading just below $91.05 after a recent peak of $93.50, with the pullback attributed to short-term profit-taking rather than a market shift.
- The price remains within a rising channel, indicating an overall upward trend as long as key support levels hold.
- Recent candlestick patterns suggest traders are hesitant but not aggressively selling, with the lack of significant downward movement indicating confidence in the current price levels.
- Key support is at $89.15 and resistance at $92.00, with a bullish outlook maintained as long as silver stays above the channel support.
Silver (XAG/USD) is trading a little under $91.05 after easing off its recent peak of $93.50 which it hit after a pretty sharp price surge earlier this month. The pull back is largely seen as short term buyers cashing in on their profits at the moment rather than a sign of a broader shift in market direction. What we’re seeing on charts is a bit of consolidation rather than a whole lot of panic selling – and so long as key technical levels stay in place, silver’s still attracting plenty of interest on dips.
On the 1 hour chart , silver is still firmly inside a rising channel which has been guiding the price up since early January. While the very top of the channel put the brakes on things near $93.50, the lower boundary of that channel is still doing its job, keeping price up, and that gives us a pretty clear idea that things are still pointing upwards.
Candlesticks Suggest Controlled Profit-Taking
The last few candlesticks are giving us some clues about what’s going on in the market – and looking at them – they do feature long wicks and smaller bodies – that often suggests traders are getting a bit hesitant and are starting to lock in some profits rather then stepping up the selling. On top of that , the lack of any real follow through down on the downside does suggest that sellers aren’t feeling too convinced about what they’re doing at the moment.
[[XAG/USD-graph]]
Silver is still holding above its 50-period EMA at $89.15 and despite a medium term bearish picture looking a bit more negative that hasn’t changed the medium term upward bias – we’re still seeing that the EMAs are sloping upwards – which means pull backs are being taken care of rather then just getting worse.
It’s also worth noting that the retracement level had some respect shown to it when it hit the 38.2% level of the January rally – which is a bit of a common spot for a trend to pause for breath.
What To Watch Out For – Support , Resistance and Momentum
The main levels that we’re keeping an eye on are the same as ever – immediate support is at $89.15, with the next level being $87.70 – that’s where we start to see some prior action clustering up. On the upside, we’ve got resistance at $92.00 – and the next big hurdle is the $93.55 level which is where the last high was.
The RSI reading of 50 tells us that momentum has cooled off a bit which is actually a pretty healthy sign – it suggests we’re just in a bit of a pause in the uptrend rather then the start of a sell off.
As long as silver stays above the rising channel support then the overall view is still pretty positive.
Key levels to keep an eye on are
- Support: $89.15, followed by $87.70
- Resistance: $92.00, then $93.55
- Overall bias: Bullish as long as above the channel support
Trading Idea
So long as silver stays above $89.15 then we’re looking at a healthy technical view – one idea is to buy near $89.20 with a target of $93.50 and a stop just below $87.50.
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